OnDeck Capital Inc. amended its S-1 filing with the U.S. Securities and Exchange Commission (SEC) to include pricing for its initial public offering (IPO). The pricing range for the offering is expected to be $16 to $18 on a total of 10 million shares, and there is an overallotment option for an additional 1.5 million shares. The company plans to list on the New York Stock Exchange under the symbol ONDK.
The underwriters for the offering are Morgan Stanley, Bank of America Merrill Lynch, Raymond James, J.P. Morgan, Stifel, Deutsche Bank, Jefferies and Needham.
The company operates an online platform for small business lending. Small businesses can apply for a term loan or line of credit on the company’s website in minutes and, using its proprietary OnDeck Score, it can make a funding decision immediately and transfer funds as fast as the same day. Since its first loan in 2007, OnDeck has originated more than $1.7 billion in loans and collected more than 4.4 million customer payments. Loan originations have increased at a compound annual growth rate of 127% from 2011 to 2013 and had a year-over-year growth rate of 171% for the nine months ended September 30, 2014.
ALSO READ: Week of December 15 Offers Variety of IPO Choices
In the filing, OnDeck described its market:
The small business lending market is vast and underserved. According to the FDIC, there were $178 billion in business loan balances under $250,000 in the United States in the second quarter of 2014, across 21.7 million loans. Oliver Wyman, a management consulting firm and business unit of Marsh & McLennan, estimates that there is a potential $80 to $120 billion in unmet demand for small business lines of credit, and we believe that there is also substantial unmet demand for other credit-related products, including term loans. We also believe that the application of our technology to credit assessment can stimulate additional demand for our products and expand the total addressable market for small business credit.
OnDeck originated $458.9 million of loans in 2013, representing year-over-year growth of 165%, and in the first nine months of 2014, the company originated $788.3 million of loans, representing year-over-year growth of 171%, all while maintaining consistent credit quality. In 2013, the company recorded gross revenue of $65.2 million, representing year-over-year growth of 155%. In the first nine months of 2014, there was gross revenue of $107.6 million, representing year-over-year growth of 156%.
The proceeds from this offering are intended to be used primarily for general corporate purposes and to potentially acquire or invest in new technologies, solutions or businesses that complement the company’s model.
ALSO READ: The 7 Worst Investments of 2014
Are You Still Paying With a Debit Card?
The average American spends $17,274 on debit cards a year, and it’s a HUGE mistake. First, debit cards don’t have the same fraud protections as credit cards. Once your money is gone, it’s gone. But more importantly you can actually get something back from this spending every time you swipe.
Issuers are handing out wild bonuses right now. With some you can earn up to 5% back on every purchase. That’s like getting a 5% discount on everything you buy!
Our top pick is kind of hard to imagine. Not only does it pay up to 5% back, it also includes a $200 cash back reward in the first six months, a 0% intro APR, and…. $0 annual fee. It’s quite literally free money for any one that uses a card regularly. Click here to learn more!
Flywheel Publishing has partnered with CardRatings to provide coverage of credit card products. Flywheel Publishing and CardRatings may receive a commission from card issuers.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
Our expert who first called NVIDIA in 2009 is predicting 2025 will see a historic AI breakthrough.
You can follow him investing $500,000 of his own money on our top AI stocks for free.